The Unassuming Economist

From a VoxEU post by Karan Bhasin and Prakash Loungani:

“Many governments have to mitigate concerns about fiscal sustainability, without triggering near-term output losses or reversing progress on containing poverty or inequality. This column assesses how the design of fiscal consolidation packages shapes their impact on aggregate and distributional outcomes. It finds that the careful design of fiscal consolidation (making use of available monetary space or choosing tax-based instruments) can lower the output and unemployment costs of austerity and mitigate the adverse impacts on poverty and inequality. The results stress the importance of monetary-fiscal coordination for maintaining fiscal buffers, while limiting setbacks to development goals.”